What to look out for in driver contracts
Driver contracts are crucially important, yet seldom talked about part of motorsports. At the grassroots level like club karting, they’re barely even used.
However, having a good contract no matter the level of racing, could prevent a lot of mishaps and unfulfilled promises that have badly affected many relationships between teams and drivers in the past.
Also without having a contract in place, signing any sponsorship deal could go very wrong for no fault of your own. This is one of the few areas you don’t want to be fast in motorsports.
This article will shed light on things that should be inspected in contracts, and draws upon the experiences of racing drivers who wished they knew this information in advance. It’s aimed to help the young driver, who is most likely bringing money to a team and looking to raise sponsorship for their racing.
By the time you get to a view a contract from a team, you should already have a general idea of the race or season’s budget. When you view the contract, you’re not just looking to make sure that the cost is what they told you, but you have to see what else you may be liable to paying for.
In a lot of contracts, consumables and spare parts aren’t included. Clarify what parts on the car ideally need to be changed throughout the season and get clear on the costs.
There may be extra expenses above normal preparation costs incurred during the season. Make sure there is a clause that says these costs should be accepted by the driver/guarantor in advance and ideally pay for these when presented with a bona fide third-party supplier invoice. This can prevent teams charging you for things you haven’t agreed to, and in some cases over-charging you.
Finally, while we never hope you have big a shunt, accidents do happen in motorsports. See if your team has damage insurance included, and make sure the contract lists out exactly what the insurance covers.
Your goal from analysing the costs should be to seal any doubts, such that when you do plan your budget and look for sponsorship. You know what you need or don’t have any bad surprises mid-season that stops you from racing.
Payment Terms and Schedule
Payment terms vary between each and every team. Ideally, you want to see the payments spread out over the season. Paying the full budget upfront just puts you in a weak position to leave if the team’s performance is far below what’s promised, or if something unfortunate happens that prevents you from racing.
Make sure there is a schedule or deadlines for the services they’ll provide. For instance, if there are 8 test days included in the contract. There’s not much value doing them all at the end of the season. For this reason, aim to have a schedule to keep the team accountable too.
It’s crucial you get on well with your mechanics, engineers, coaches and other staff in your team to perform well. Is there a specific person you want to work with? Then make sure it’s written down.
Teams can sell you on the fact X coach and Y engineer is in their team, but the contract may simply say you’ll be provided with “a race engineer, support crew and mechanics.” If people in the team change at any point or aren’t who you expected, then you may not be able to do much if the contract doesn’t specify names.
Is the contract too one-sided?
There will likely be terms which state the behaviour expected from the driver. How about the team? Is there any clause that prevents them from bringing your name into disrepute? Or compensation for your car not being able to race? Aim to make things as fair as possible.
Make sure there are no vagaries. They’re commonly found in statements which include words like “…will be considered”. Clear up any doubts before you sign. Only once you’ve signed, then pay the team as agreed.
Ultimately if you don’t feel good about working with someone, listen to your gut. No contract in the world could prevent every eventuality, but having a good contract can hold you and your team to a higher standard and increase the chances of having a successful season.